In a telling exchange House Speaker John Boehner, R-Ohio, and Sen. Charles Schumer, D-N.Y., explained how Washington politics could doom the United States to an even more serious economic mess.
Regardless of whether they meant it that way, it was a damning indictment of the current state of American government – and a stark reminder of the importance of this fall’s election.
Tuesday, Boehner in essence said that when the federal debt ceiling needs to be raised early next year, he is going to repeat last summer’s stand-off that led to a downgrading of the nation’s credit rating.
In response, Schumer accused the Republicans of deliberately weakening the economy to hurt President Barack Obama’s re-election chances.
“The last thing the country needs is a rerun of last summer’s debacle that nearly brought down our economy,” Schumer said. “I hope that the speaker is not doing this because he doesn’t want to see the economy improve, because what he said will certainly rattle the markets.”
Leaving aside questions of intent or motive, Schumer is at least half right.
If Boehner and company can and do force another standoff over raising the debt ceiling, the economy will face a triple threat of tax increases, spending cuts and another credit downgrade.
If nothing is done, at year’s end the Bush-era tax cuts and the payroll tax holiday will expire. At the same time, the “automatic” spending cuts agreed to in the last debt-ceiling debacle will slash $1.2 trillion from domestic and defense spending.
The Washington Post reported last week that defense contractors are already cutting jobs.
Together with another debt-ceiling fight, the combination of tax increases and spending cuts – effectively an anti-stimulus package – could drive the country over, what Federal Reserve chairman Ben Bernanke called a “fiscal cliff.”
Sadly, the nature of Boehner’s threat bolsters Schumer’s accusation.
The debt ceiling only authorizes the government to borrow money to fund spending already approved by Congress.
Refusing to raise it will not cut spending. It would only force the country into default and damage the nation’s credit rating.
Threatening that is akin to holding one’s own family for ransom.
Only the voters can put an end to this shameless kind of politics.